Macau GGR May Have An Uptick In Second Half Of 2020: Deutsche Bank Securities

Macau battling with slumping casino revenues can hope for a recovery in 2020. According to a report from Deutsche Bank Securities Inc, it is probable that the growth in Macau’s casino gambling industry would come towards the second half of 2020.

In its report, analysts Carlo Santarelli and Steven Pizzella wrote that they are projecting Macau GGR growth to be back-half-weighted in 2020, with aggregate GGR growing 3.6 percent year-on-year.

They further stated that they expect a project mass GGR growth of 16 percent and that they are projecting an 11 percent decline in VIP GGR.

The analysts said that what would likely influence the second-half performance of Macau’s casino gambling industry is that there would be stabilization in VIP comparisons. The projections were made based on the slip in GGR for the second half of 2019 and therefore it is said that the base for assessing year-on-year comparison would lead to a positive figure for the coming year.

GGRAsia quotes the analysts from their report: “With limited new supply in 2020, we expect shifts in operator EBITDA [earnings before interest, taxation depreciation and amortization] market shares to be more related to the performance of – and relative exposure to – the mass and VIP gaming channels.”

The analysts made a reference to the fact that there was no significant and new gaming product that would be introduced in Macau’s casino gambling industry.

In its report, the Deutsche Bank also said that the US-based gambling operators including Las Vegas Sands Corp and Wynn Resorts, both of which operate casinos in Macau through their subsidiaries were in a good position to benefit the coming year.

“Given the redevelopment activity at Sands Cotai Central throughout the majority of 2020, we anticipate net new room growth is likely to remain relatively subdued, over the course of 2020,” said the Deutsche Bank team. The report also forecasts a 1.5 percent table supply growth in the market in 2021.

“Our table growth forecasts do not include incremental table authorizations for some of the recently-opened properties, which could potentially add another 1 percent to the table supply growth rate. Assuming 1,000 slots at Grand Lisboa Palace, our slot-supply market forecast is up approximately 6 percent in 2021,” it added.